Connellsville Redevelopment Authority accepts reduced share in hotel development
CONNELLSVILLE — The Connellsville Redevelopment Authority agreed to take a 4 percent cut in the return on in its investment in the proposed Cobblestone Hotel and Suites project on Monday.
Board members unanimously voted to accept a 5.1 percent share of the hotel’s profits from the developer Hotel d2 after meeting with Tom Rosselot, company president, and his son Chris Rosselot in executive session.
Approved in March, the original limited partnership agreement called for the authority to receive 9.1 percent share of the 54-room hotel’s profits in exchange for making a $100,000 investment.
The authority received a grant from the Katherine Mabis McKenna Foundation of Pittsburgh to make the investment in the $4.5 million hotel, which would be built on North First Street on the site of the closed Connellsville Bottling Plant adjacent to the Great Allegheny Passage.
To help compensate for the reduced dividends, the authority will receive a portion of the rent from the retail shop planned for the first floor of the hotel, said Michael Edwards, authority executive director.
Board members agreed to accept the reduced shares to keep the project moving forward, Edwards said, adding that the three other investors in the development are not being asked to accept a reduction.
Earlier this year, the investors agreed to a request from the developer for $10,000 to help cover predevelopment costs such as architectural and engineering costs and the $8,000 cost of a state wetlands permit application.
Hotel d2 would spend the investor’s money first on work such as demolishing the bottling plant and raising the level of the lot by 3 feet due to its location in a flood plain before it would spend its loan money, Edwards said.
The developer has not yet secured financing for the project.
In unrelated business, Edwards told board members that the authority, municipalities and nonprofit organizations will be able to apply for some of the local share money Fayette County will receive from the gaming profits from Lady Luck Casino.
He said the state Department of Community and Economic Development recently approved the county’s plans for the Fayette County Redevelopment Authority to accept applications for the money and distribute it.
The county redevelopment authority is planning to hold a meeting to discuss the process, Edwards said.
In other business, the authority agreed to revise the 2013 Community Development Block Grant, reducing demolition funding from $50,000 to $25,000 and increasing money for East Park renovations from $15,000 to $40,000 so enough money is available to award a $46,500 contract for the work. Connellsville City Council must approve the revision also.